Obstetrical brachial plexus palsy, one of the most complex peripheral nerve injuries, presents as an injury during the neonatal period. The majority of the children recover with either no deficit or a minor functional deficit, but it is almost certain that some will not regain adequate limb function. These few cases must be managed in an optimal way. Considerable medical and legal debate has surrounded the etiologic factors of this traumatic lesion, and obstetricians are often considered responsible for the injury. According to recent studies, spontaneous endogenous forces may contribute substantially to this type of neonatal trauma. All obstetric circumstances that predispose to brachial plexus damage and that could be anticipated should be assessed. Correct diagnosis is necessary for the accurate estimation of prognosis and treatment. The most important aspect of therapy is timely recognition and referral, to prevent the various possible sequelae affecting the shoulder, elbow, or forearm. Since the early 1990s, research has increased the understanding of obstetrical brachial plexus palsy. Further research is needed, focused on developing strategies to predict brachial injury. This review focuses on emerging data relating to obstetrical brachial plexus palsy and discusses the present controversies regarding natural history, prognosis, and treatment in infants with brachial plexus birth palsies.